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Guest Post: Will "Tax the Rich" Solve Our Deficit/Spending Crisis?
Submitted by Charles Hugh-Smith from OfTwoMinds,
Will "Tax the Rich" Solve Our Deficit/Spending Crisis? (December 28, 2011)
If we look at tax revenues and income in a practical way, we find "tax the rich" will not close the widening $1.5 trillion gap between Federal revenues and spending.
Clearly, $1.5 trillion annual Federal deficits to fund the Status Quo--fully 10% of the nation's GDP--is unsustainable. Eventually, the ad hoc "solutions" currently being pushed by the Federal Reserve--zero interest rates to keep borrowing costs artificially low and money-printing operations that buy Treasury debt--will encounter political and/or market pressures which will limit the marginal effectiveness of these interventions, and the real cost of these historically unprecedented deficits will trigger a host of unintended consequences--all negative.
Everyone knows there are only two ways to bring deficits back to sustainable levels: skim more tax revenues from the national income or cut spending on the massive Status Quo programs of Defense/National Security, Medicare/Medicaid and Social Security. The rest of the Federal programs so reviled by various constituencies are a relative drop in the bucket.
Everyone with a stake in the Status Quo Federal spending--and that is certainly in excess of 100 million residents of the U.S.--is vocally in favor of "taxing the rich" as the "obvious and just solution" to the widening gap between revenues and spending.
If there is one stance that can gather non-partisan support, it's "tax the rich." More knowledgeable observers refine this to "tax the super-rich," as the majority of the wealth and income of the top 1% is actually held by the top 1/10th of 1%.
We can break this idea down into two basic parts: the ethical case and the revenue case. Ethically, at least in a democracy, the idea that everyone with substantial wealth and income should pay at least as much (as a percentage of income) as wage-earning citizens is compelling.
Various studies have found that the extremely wealthy pay about 17% of their income in Federal taxes, which is less than half of what we self-employed people pay (15.6% self-employment + 25% Federal tax on all income above about $34,000 = 40.6%).
The merely well-off--typically professionals, managers and small business owners--pay the majority of Federal taxes, with the very wealthy paying a substantial share as well. Roughly half of all those filing tax returns pay no Federal tax other than the employees' 7.65% FICA (Social Security) tax.
In the larger scheme of things, the bottom 60% of the workforce pays relatively little of the total Federal tax revenues. (Check U.S. Census records or search my site for sources that break down the sources of Federal tax revenues.)
In other words, the "rich"--or those who the average person considers "rich"--already pay most of the Federal taxes.
How much additional tax could be raised were the super-wealthy to pay the same 40% rate that we self-employed people pay? It is tempting to estimate that another $1 trillion or so could be raised from the super-wealthy, largely from non-wage (unearned) income.
I have addressed this yawning gap between spending and revenues in the past, for example:
The Promises That Cannot Be Kept (July 6, 2011)
As noted in the above entry (the TrimTabs chart), Americans' after-tax income is around $5.3 trillion and $900 billion in income from "other sources." Additional taxes would of course come from current after tax-income. It's difficult to sort out all the various measures of income; the BEA, for example, includes "government transfers" as personal income--though those transfers come from tax revenues.
Including government transfers and arcane categories such as "inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)", the BEA counts $12 trillion in earned income. But if strip out transfers and inventory adjustments etc., that number drops to around $8.4 trillion. (Two Americas: The Gap Between the Top 5% and the Bottom 95% Widens August 18, 2010)
Total Federal tax revenues are about $630 billion from Social Security taxes and $1.5 trillion from Federal income taxes, or a total of $2.1 trillion. To Fix Social Security, First Ask Why It Is Deep in the Red (January 18, 2011).
There are local and state taxes, too, of course, which leaves the $6.2 trillion in after-tax income noted earlier. Since the top 10% collect roughly half the income, we can guesstimate that the top 10% receives about $3 trillion. To balance the current budget, they would need to pay 50% of their after-tax income ($1.5 trillion)--on top of the substantial taxes they already pay. (maybe the top 1/10th of 1% pay 17%, but the merely wealthy pay much higher rates on earned income.)
Add this up and you get tax rates of around 65% on the top 10% (25% total income rate plus 50% of the remaining income).
We then have to ask whether these rates would ever be collected.
There are a number of factors that affect actual tax collections from theoretical calculations. One is that Congress is a collection of wealthy people who are seeking to increase their power while minimizing their taxes and those paid by their cronies and contributors. As long as this is the case, then the tax code will continue to be thousands of pages long with exclusions, taxbreaks and exemptions for the politically connected wealthy.
Another is that studies have found Federal tax collections have historically topped out around 21% of total income. Above that level, people make choices that reduce their tax burdens.
Just as a thought experiment, put yourself in the shoes of someone with $20 million in assets and an income of $1 million. First off, you have a tax attorney who works the complex tax code to put as much of your income as possible in lower-rate income--for example, long-term capital gains.
Wealthy individuals shelter their income and assets with corporations, which have many more options in terms of shifting income.
Secondly, you have overseas accounts, assets and options. Let's say you are ethical, and pay your legal taxes without resorting to questionable tax havens. Let's stipulate that you are just like any other taxpayer--you feel no obligation to pay more than your legal share.
International agreements mean that income need only be declared and taxes paid on it in one jurisdiction. So income declared in Switzerland is exempt from taxes in the U.S., as taxes have already been paid in Switzerland.
Though I am not that knowledgeable about tax law, anecdotally it seems total tax rates in Switzerland are around 25%. If rates in the U.S. were jacked to 50% or higher, then very wealthy individuals will shift income to places like Switzerland and pay the lower tax rates there--perfectly legally. They would also liquidate assets in states which attempted to raise taxes on real property or enterprises, and shift those assets to lower-tax states or nations.
This would not be perceived as "tax avoidance," but as rational money management. In this sense, the super-wealthy are simply doing what every household does--attempt to lower taxes by whatever legal means are available. The means available to those with income and assets that can be shifted around are simply more capacious.
In practical terms, collecting another $1.5 trillion annually is problematic on multiple levels. Practically speaking, it might be wise to align total U.S. tax burdens with those of Switzerland and similar developed-world tax havens, for those essentially set the top rate that very wealthy individuals will pay.
Such a system would flatten taxation rates and very likely increase total tax collections. But it is simply not practical to think that the Federal government can skim 45% of the nation's $8.4 trillion in income to fund the bloated, corrupt and inefficient $3.7 trillion Federal budget.
How about those soaring corporate profits? If we taxed 100% of the $1.5 trillion corporate profits, then we could close the $1.5 trillion budget deficit. But then Wall Street would have nothing to support those sky-high stock valuations.
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1st off - Bullshit!
Everyone pays the price for those bailouts - from higher prices to lower job opportunities etc.
2nd - Everyone pays Taxes in America. Funny but the rightwingers Only want to talk about Federal Income Tax. Add in all the other taxes from FICA to gas taxes to property and sales taxes and the lower income levels Pay much higher rates.
3rd - tax the shit out of the rich and their ability to bribe the guv into doing their bidding will decrease - that alone will decrease guv spending.
4th - make the wealthy predators actually pay an Equal Overall Tax Rate and watch those little bitches whine and cry - taxing the wealthy just to see them moan would be worth it alone.
5th - if the rich actually had to start paying like the rest of us maybe we wouldn't spend more than the rest of the world Combined in military expenditures.
6th - it's the rich predators choice - either allow higher tax rates or face the historical answer - during the revolution we tarred and feathered them. The ruskies lined them up against a wall and executed them. The French invented this nifty little toy called the guillotine and at the end of WW2 this is what happened: http://www.custermen.com/ItalyWW2/ILDUCE/Mussolini.htm
Makes the high rates by FDR and Eisenhower not look so bad.
Too bad the wealthy are sociopathic predators and will force a violent conclusion.
If you can explain to me how sales tax contributed to the TARP bailout, I'll respond to everything else.
Otherwise I'm not dignifying this with any further response.
Of course you won't cause you can't without looking more and more like a propagandist
So he got you on the sales tax?
Wish I could upvote you more.
You did a great job of naming a bunch of state taxes that did not contribute to the FEDERAL bailouts. It is accurate to say that the bailouts for big businesses were funded by federal taxes that were collected from primarily big businesses and the wealthy. I'm not saying that the bailouts should have happened (they shouldn't have - that's not capitalism or a free market) but let's be honest about who the NET tax payers are at the federal level. The bulk of America receives more services from the federal government than they pay for.
I also think it is a little odd that we criticize large businesses and the wealthy for being heavily involved in government decisions. If you and your friends pooled $100 (of which you contributed $80) for booze, wouldn't you want the largest say in what you should be buying?
As long as we have a huge government that depends on enormous tax revenues from a small demographic (the rich), that demographic will have a large influence on government decisions. If we shrink the government and cut tax rates (ie lower dependence on one group), there would be nothing to unfairly influence.
The bailouts from TARP are minimal compared to the Fed programs - which affects us all for Christ sakes.
Propagandists always point out tarp and say Hey it made money!
They of course ignore the Fed bailouts which have cost ALL Americans thru lower pensions, lower paying jobs, higher bills etc - add those costs into the equation and the average person would wake up and string the rich up by the scruff of their neck guaranteed.
You lie by omission.
Besides FICA is stolen by the fed guv but you propagandists always leave that out also.
The rich pay a FAR LOWER tax rate than the rest of us - and that's the income they claim - what of the shit they hide?
And that's even including the guv handouts that flow straight back to the wealthy sociopathic predators - of which I guess you are either one or one of their henchmen.
I think you missed my point entirely. You seem to be advocating a LARGER government that it can provide more services for us (pensions, high paying jobs, etc.). Larger government requires higher tax receipts, which requires either more taxation on a broader base of people (you're likely to oppose that) or higher taxation on a small number of individuals (you like that a lot).
Creating a system that doles out more and more services only enables it to be gamed to gain undue advantages in the marketplace. It makes sense that the people who most effectively game the system are the people with (1) the resources to do so and (2) high influence because they contribute greatly (remember those tax receipts from rich folks?) to government revenue. If you advocate a system that provides more and more services, you shouldn't be upset when many of those services end up benefiting the people who are responsible for the bulk of their funding.
And sure, the rich might pay lower total tax rates than some. However, most of the income is likely coming from capital gains as opposed to income. These capital gains were (1) at some point taxed as individual income, (2) have most likely been taxed at the corporate level, and are (3) again subject to a 15% tax. If you trace the TOTAL taxes that have been paid on that income at each level, it will be higher than the average American's tax rate. A final point is that 15-20% of millions is still FAR more than 30% of a 60k salary. To say that the rich don't pay their "fair share" is silly to me.
And all of this is coming from a guy that makes less than $50k a year but aspires to be one of the members of society that you hate so much (not a "sociopathic predator" but a productive business owner and savvy investor).
And I think you missed my point.
The rich don't pay way more than the rest of us.
Hell the fed debt is raised by more than the rich pay in taxes thereby offsetting their taxes they do pay.
Much of the Gas taxes are federal -
FICA is also a fed tax that propagandists love to ignore.
And the real question is do you want to live in a highly stratified 3rd world country?
Many of the rich say HELL YEA if I can keep another nickle.
And my reply is we'll be coming for your LAST nickle when we start stringing up e rich.
That is the inevitable conclusion to higher and higher levels of income disparity.
Then watch your wealth disappear in the fog of riots?
But then as I always argue the rich don't give a shit - they lack empathy which is the defining characteristic of a SOCIOPATH.
Why people care about income disparity is beyond me. It is not an important measure in my mind, although it does drive social change and revolt (as you suggest that you're going to be robbing and stringing up the rich).
I think a good analogy for income disparity is a foot race. Some people are faster and will naturally pull away from the rest as the race goes on. However, EVERYONE is moving forward (if they want). Your solution seems to be taking a baseball bat to the knees of people faster than you. Sure, now you'll run at the same speed, but are YOU really any further along? If you think you would be better off because you can just take their things, that's a horrible world to be living in. The natural course of events would be further violence and people come to take your things...
The measure should not be "where am I relative to others," but "where am I relative to where I was previously." Hey - I have a TV, a cell phone, food, and a place to live. That's pretty good, but I'd like a new car too. What my neighbor has or doesn't have does not affect my current situation and I shouldn't care about it (people are hardly that rational, though).
I suspect @woodyg sees the rich as being all zero-sum predators. He would probably say that it is the rich that are clubbing the other people's knees in order to get ahead.
What you don't appear to grasp, woodyg, is there is an entire spectrum of ways to become rich - a continuum that stretches from the entirely predatory, to the entirely value creating. ie, there is wealth-extracting, and there is wealth creating.
We should be concentrating on eliminating the possiblities of becoming wealthy through wealth-extraction, not hitting everyone with the same blunt tax hammer, regardless of how they made their wealth.
Agreed. That is the problem of those that want to define poverty on a relative basis rather than a absolute basis. If you are a relativist, it is a slippery slope to everyone gets equal outcomes. A form of government and economics I thought we defeated last century.
It is still unclear how equal the redistributionists want income to be and why that level is the "correct" distribution? Were the 1970s or the 1990s the "correct' distribution -- why or why not? How will we know when we have reached the correct distribution? How can we enact policy when we do not know the target distribution?
Why do you propagandists always put words into the mouths of people they disagree with?
I never said I support a larger guv - I want a Much smaller guv - starting with closing some of our 1000+ foreign military bases.
Glad we're in agreement! Sorry to equate your call for higher taxation with growth in government (although I think it's inevitable). But I am a little confused why higher taxes would be necessary in a world with dramatic spending cuts - unless the intention is to pay down US debt immediately, which probably isn't necessary because the US can borrow at ridiculously low rates (albeit artificially low thanks to the fed, but low nonetheless).
Anyone who drinks the Sheeple Kool-Aid from the MSM, believes, that the 'answer' to all of our economic problems lies in 'taxing the rich' or 'cutting entitlements'.
Doesn't everyone realise, by now, that both sides of our One Party Government want to put the American people on austerity programs to pay for the losses of the banking sector and fund endless wars that make the same people wealthier still while destroying millions of lives along with our domestic economy?
AUSTERITY=taxing people more and cutting what they get in exchange for this tax.
With the current line up in Congress and the current line up of candidates running for President (except RP), where does everyone think that this extra money is going to go?
insulting the Occu-tards around here will get you downdings.... ;-)
$1.5 trillion? Hell thats now nothing but the avg 2 to 3 months required raise in the debt ceiling.
Sho you right!!!
Go after the big bucks,
Raytheon = Krupp
GE = Siemens
Boeing = Messerschmitt
Northrop = Heinkel
You know, that death merchants who feed at the bottomless trough and kick back to the CONgress critters.
"the idea that everyone with substantial wealth and income should pay at least as much (as a percentage of income) as wage-earning citizens is compelling...."
indeed it is but the issue goes deeper....the wealthy receive an inordinate amount of government benefits....while everyone whines about some low life welfare mamas collecting thousands for all of her illegitimate chilluns, they need to whine about the plutocrats whose intelligence and military operations do their bidding overseas for pecuniary reasons only....less than 10% of the military outlays are truly for defense....the remainder are for wars of foregin aggression to protect oil and markets - a benefit which accrues primarily to the wealthy....this says nothing of the regulations and courts which serve plutocratic interests....
furthermore, the plutocrats own the government for their benefits...therefore they should pay for it...what welfare mama is served by the sec?
finally, regarding concentration of weath, heavier taxation on the wealthy is appropriate....i am sure there are better ways to do it but the 3d world wealth concentrations in amerika which have ended the republic can be broken through taxation....but of course the millionaire congress isn't going to do it....
i agree that taxes introduce perverse incentives and reduction of work is not a noble goal but a combination of higher capital gains and personal taxes on the wealthy are in order and they would raise substantial revenues although certainly not in a linear fashion from the current base.....
to whom much is given much is due (required).....
... the remainder are for wars of foregin aggression to protect oil and markets - a benefit which accrues primarily to the wealthy ...
Really, genius? Who would be hurt more by $10/gallon gasoline, the 1% or the 99%? Some of you Paulites need to step away from the rhetoric and take deep breath.
Where the fuck are you getting $10 gasoline from? You do realize that even with fewer oil imports we would not be facing $10 gasoline. Hell, if we had a pipeline running south from Cushing OK the U.S. would be EXPORTING WTI right now. We are already one of the largest exporters of refined petroleum products. To say that our access to oil justifies and is worth our outrageous military expenditures is laughable.
By the way, if you want to criticize Paulites come at me. The guy you're targeting is a poor representation of a libertarian.
Tony, you outline a very compelling argument in favor of higher taxation on a select demographic. Your comments about how the wealthy benefit from the SEC and other government actions are certainly correct. Your answer seems to be tax according to the benefits received because the rich seem to get unique benefits. I would like this system if we could accurately account for how much a person benefits form the system. A good example of this would be toll roads - you use 'em you pay for it; if not, you don't. However, we can't do this for most government services. An alternative (and one I like much more) would be cutting any government expenditures that do not clearly benefit everyone equally. This would leave a government designed solely for the protection of individual liberty by providing military for DEFENSIVE PURPOSES and a robust court system. Under this sort of system, everyone pays equally (through a simplified tax code) and everyone benefits equally (same services all around).
SUE EVERYBODY!
http://www.youtube.com/watch?v=QhjBlPucpd0
but first: TAX EVERYBODY!
no wait, TAX NOBODY!
no wait, still wrong...
hell, i go figure it out tonight when i am camping in front of my bank, surving the web with my ipad and drink nice coffee for 5 bucks a cup!
life as a revolutionary is soooo difficult...
Tax the rich and ruin the incentive for the wealthy to take risks on creating systems that create resources...great plan.
Tax the rich and take from the productive and give to the unproductive...great plan.
Tax the rich and squander the resources that are used to create jobs...great plan.
Tax the rich and give the government the money to dole out instead...great plan.
Tax the rich and make everyone poor so there's no incentive to work hard...great plan.
Tax the rich and push the productive members of society out of the country...great plan.
TheSilverJournal.com
You may want to lay off the koolaid for a while.
You may want to open your eyes and realize that high taxes, high regulations, and high spending are destroying the economy.
Eat the rich.
Hope you were paid well for this dumb ass propaganda filled post.
The Ministry of Truth is Alive and well today.
Are you one of those people that thinks government creates jobs?
TheSilverJournal.com
And you are one of those people who think that any abstract entity has monopoly on slave position creation?
Government is the one that enslaves when it steals what others produce.
Exactly. Governement is mostly just carefully disguised private interest. Its a full cycle but you chose to point your finger at single link and yell : Thief thief!
And some rich bitch standing (technologically) on shoulders of our common efforts earning 10.000 times the ordinary person who gives his/her best is plain idiocy! Do you seriously believe that any single person has more than 20 times human potential of an average? Its all priviledged, set up, subtle coersion based, disguised violence.
And your solution is to give the government more resources?
Not all rich people are on the governments dole. Yes, I believe Stever Jobs had more than 20 times potential of average. Ruin the incentive for Steve Jobs to get rich and then do you know what he produces?...Nothing. Zip. Zilch.
Go find a socialist website to chat on.
Nope , that's not how it works at that level.
He had all the money he could ever spend or waste before Apple2nd time.
You don't really understand how or why wealth is created , however you may understand the wage side of the coin.
Leave it alone ,your posts show incredible misunderstanding of great wealth concentration.
It's beyond you.
You're right, he would've worked for free. Ha..please don't be such a moron.
Clearly, you don't understand where money comes from or why people work at all.
If he's dumb enough to fall for that $1/year BS that Apple PR was pushing, he's dumb enough to believe that "raising tax rates" on the rich as widely propsoed would have more than ZERO impact on the taxes Jobs paid.
By the way Jobs and his Chinese bagmen and slave merchants did a bang up job killing US manufacturing jobs while creating Chinese wage slaves all for the benefit Calpers pensioners and their fund money ilk in the giant fiat ponzi.
I have some projects I would like to work on that would cost Trillions of dollars. While there are practical limits to the amount of money a person can spend on "stuff", there are always other ways people can use vast amunts of wealth productively.
Another point you are missing. You should understand that Steve Jobs was no different than 200M other people. That he got on top is just a symptom of our emergent monkey society (199.999.999 Steve Jobs didnt get to the top). It could almost be anyone else. But you are slave (mentally) to those same owners who created his myth. Its in their best interest to keep selling you this bull and their shiny overpriced, degenerated products to buy them for money you dont have (but have to work for) and to cheer for free! They are geniuses indeed!
So according to you, everyone's equal and its just dumb luck if you win or lose at life. Well, I guess there's no use in working at all ever again since somehow I just might magically get rich by being lazy.
But it is dumb luck.. its just easier for your mental conditioning to believe that meritocracy exists.
Normal (basic needs met, socialized, well rested etc) human being cannot sit even for an hour doing absolutelly nothing. Try it yourself.
If that ability exists, its a symptom of deprivation and violence of some form.
Why would you want to get rich? Are you lazy? :D
Let me guess, you +1 everything you say and -1 everything I say. I know this because nobody else out there would agree with your nonsense. Keep on patting yourself on the back.
Looks like you hopped on your other account to +1 yourself some more.
Think what you want when you have nothing else to say.
btw As this became quite personal, I would like to tell you that I respect you as fellow human being. I just want to help you get out of your little box.. I have mine and we should help each other.
I respect you, as well as all human beings, which is why I will keep calling for government to shrink in size and to stop squandering resources and limit the people's freedom. But you're really not helping spread this message. The time is now or never because once hyperinflation hits, resources will shrink and either capitalism will be unleashed and we'll get through it, or socialism will swallow the US whole.
"Normal (basic needs met, socialized, well rested etc) human being cannot sit even for an hour doing absolutely nothing. Try it yourself."
And why do you assume that a person would rush to do something "productive" (something that society needs and willing to pay for)? More likely than not in the absence of incentive a "normal" person will do nothing "productive", but something enjoyable, which is usually "unproductive" (going on the beach, playing video game, etc.).
In my opinion, fundamental goal of economy is sustainability and emancipation of all human beings from dangerous, boring and repetitive work. In this moment we could achieve most of it, but not as long as we are slaves of income through employment concept. Turn around you, but really well, bottom to top, how many people today, in developed countries, service problems instead of solving them? How many people really do something "productive" as you would imagine that concept? Not many. Still we are here and there is abundance around us, we just dont have the money. Once energy question (system bottleneck) is solved well, economy will again start to resemble real economy. Its all distorted atm and we are still in collective shock of all good and bad which happened during last few centuries.
Giving the government more tax money to spend on 'what the majority of the American people want' the government to spend this money on, is like giving a crackhead cash and asking them to spend it on school books.
If history is our guide, it will tell us with the utmost certainty, that the government will spend this fresh money on the same people that are currently pulling their strings; the same people that are currently lobbying them for billions in hand outs, bail outs and subsidies. None of this money will go to where 'the American people' want it to go, none of it, and anyone who thinks differently, must still believe in Santa Claus.
No I think the guv is simply a wholly owned entity of the worst of our predator corporations.
Jobs and wealth are created by the average lower and middle class person.
Most jobs are create by those categories of earners - and most demand and stimulus also.
Butnwe now have a guv of, by and for the rich -
Another propagandist trait is to put words in one's mouth - twisting and skewing their points beyond comprehension.
Or maybe they're just dumb.
"Jobs and wealth are created by the average lower and middle class person"
Do you have any idea what jobs or wealth actually are? Is English your native langguage? Incidentally, government jobs, which don't even create actual wealth, are entirely and explicitely created by TPTB.
The vast majority of jobs in America are created by small business where the owner makes less than 300,000 a year -
So that means exactly what I wrote above.
I wish you rightwingers had a higher comprehension level where we wouldn't have to continually spell out exactly what we mean - or you wouldn't go putting words in others mouths they never said..
300,000 per year is a 1%er, the lower and middle classes are debt slaves not owners.
I don't fit into your intellectually limited little peon partisan view of the world.
Disingenuous gobble-de-gook with conveniently selected numbers. Raise the top marginal tax rate to what it was during the presidency of Truman, Eisenhower or JFK: 91%.
Too patriotic for you? Then just raise it to what it was during Johnson: 75%.
Okay, fine. How about Nixon, Ford or Carter: 70%.
And keep it there.
To that Peter SHILL, famous market analyst explains: But rarely anyone payed those silly taxes.
http://youtu.be/UGL-Ex1CD1c?t=16m34s
Strange article.. it seems as if it is pandering to common sense and reason but on other hand it misses to mention DEFENSE budget and how fucked up and illusory whole system is. Not just the government, but system as a whole, both with theory and practice. Disguised modern slavery maintained by chaotic mess of modern aristocracy.
At least in US, there is enough of everything (food) for no children to be hungry. How is that compared to some imposed, idiotic, artifical BULLSHIT frame about deficit?
No, he doesn't talk about the evils of plastic rice, pop videos or floride, either.
The article discusses (and dismisses) the 'tax the rich' meme.
If the debt creation monster was reigned in, the rich wouldn't have so many fiat dollars to extract and hoard to begin with. Our debt is born from a sleazy prostitute in a crack house but once it lands in our accounts that same debt is as pure as January snow. It seems to me there will be no solution until honest money is in place. Everything else is a distraction.
This entire bogus hassle can be solved with an exemption for incomes earned in a business. The real targets are the mega-wealthy that creat nothing but huge incomes on massive wealth via speculation, insider trading, interest income, etc... like the scumbags at Goldman and JP Morgan... speculators and manipulators... or the "old money" gang like the Rothschilds and Kennedys.
Next, what is wrong with means testing for SS and Medicare? Say, people with over 10 million net are excluded... Next, eliminate 90% of foreign aid. Next, no welfare or healthcare or citizenship for illegals. Next, all welfare recipients must report to work camps for 40 hours/week for internal projects. Next, eliminate BO's healthcare debacle and make Medicare available to 55+ citizens. Next, cancel all "free" trade agreements and apply stiff tariffs on everything not made in the USA.
Look, unlike tax cuts for the rich, we've already paid for those Social Security benefits. They are fully earned and deferred compensation. But because we just had to go off and blow the cash on useless stuff like tax cuts for the rich and pointless wars, the money is spent. It's time for the people who got us into this mess to shoulder their fair share. And, yes, that means cutting our bloated military and making the rich pay their share. I've already paid mine and then some.
Go look at the census data and find the numbers - taxing the rich will not solve the deficit problem. When did a democracy ever act rationally? Should the rich be more equal than the less rich? Should we continue to spend less on education so that Americans are not critical thinkers, reactionary, and more easily misled? Who will stand up to corporate interests if the government has no money? How do you change the paradigm of less government and less taxes implying that the rich have all the power?
Who will stand up for corporate interests if the government has no money?
There. Fixed it for ya!
It's easy. As Government spending is a part of GDP, just get the Government to spend as much as it can and more, and the annual deficit, as a percentage, will fall.
Just in case...sarcasm off...
DavidC
AX and REND.
Bitches.
This is horse shit but almost sounds reasonable. You make it sound "rational" that when a rich guy feels like he's been taxed enough he can just walk with his money. No big deal... Well Just try following only the laws you feel like if you live in the less than uber-rich real world.
The Uber-rich need to be taxed more and the relative tax rates should be more fair. NOT FLAT!
Cut spending with an axe! Specifically, get rid of earmarks and slash the military budget.
Social programs need to be there. But not in handout form I agree.
And for god sake stop cutting education! We'll soon have nothing to defend with our huge military but a nation of idiots.
If you want to take anything from Switzerland, take direct democracy and good, low cost, high quality education.
Not trolling I swear... I'm just really tired of this line of argument...
""We'll soon have nothing to defend with our huge military but a nation of idiots.""
I HAVE NEWS for YOU and you are not going to LIKE IT!
Noooob
If we could trust the current government to do the 'right thing' with our tax money, I would understand your arguments.
Any income tax should have 100% participation from the workforce even if it's as low as 1%. Everyone benefits from the government in some way, so everyone should pay. The problem with our current system is that many in the middle class pay very little in federal income tax and some of the poor actually receive money than they pay through the EIC.
Now hold on just a minute, Charlie. You're not doing the math right.
Look: a 100% corporate profits tax would indeed leave Wall Street with nothing to support current valuations. But Wall Street already has nothing to support current valuations! Such a tax would therefore give Wall Street twice as much nothing with which to support valuations, with the unavoidable result that prices would necessarily double!
Finally understanding this, I weep with joy. It's all right. Everything is all right. I have won the victory over myself.
I love Big Brother.
Lets go with the liberal plan and see how it adds up.
Bush tax cuts 370B annually
Cost of Iraq/Afghanistan 129B annual average
tax the rich plan(obama jobs bill) 150B annually
total 649B annually
You can see that if we give the left every single thing it dreams of that we will still be short nearly one trillion dollars.
But if you stop fighting about those drops in the bucket and ADD spending cuts (i.e. actual negotiations instead of hissy fits) then maybe you start to move the pile.
Lots of 'good stuff' we just can't afford for the next, oh, twenty years or so.
But, and this is crucial, there must be market competition in health care and education--serious competition, like Asian university and Latin American hospital branches in every city. The areas where we are still experiencing monopoly-based inflation need to be rooted out with sharp blades.
I am also real tired of hearing the "drop in the bucket" excuse. Drops add up.
the economic costs of idiots like you running around is around $8 trillion a year. Another headless chicken running around spouting off partisan drivel.
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See I can peck on the keyboard without making a point just like you.
Dang it, man! I thought that was Klingon!
I read someplace years ago that the Kennedy family was more or less without real income, living on old Joe's bootlegging money, and paid virtually no taxes.
A tax on income not gained by productive work, at about 45%, would call in some financial 'industry' money for the whores in DC to squander. Maybe the powerful people would rein in the squandering if they had to cough it up quarterly.
A financial transaction tax of 1/2 % might help steimy the HFTrading as well.
Rich people that don't like it could be swat teamed at 4 AM and when the coke is found, seize all their assets, houses, money and cars. War on Drugs, right? Fair's fair. They do it to the proles.
And who will then create jooobs for peasant slaves?
I guess it would be whoever is creating them now. (Where are they?)
Exactly. It seems that our bottleneck is in fossil fuels. And social control of those having nothing to lose.
the squid dont pay NO taxes. I dont even think they exist in the tax radar. Once your are part of the club you dont have to concern yourself with trivial matter like that any more.
"If we taxed 100% of the $1.5 trillion corporate profits, then we could close the $1.5 trillion budget deficit. But then Wall Street would have nothing to support those sky-high stock valuations."
Yes, that will work ONE time and of course all of the butt puppets in DC will there after be good and not spend all of their allowance and their "chilens" too.
We have resorted to contimplating the "too dumb to contimplate", if this is the case why not mortgage planet earth to Krugmans aliens and pretend they paid off the debt, we can then attack them and wipe them out. I am sure Spielberg can come up with the footage of the battle.
Here is a thought. DONT GIVE A FUCK ABOUT THE NATIONAL DEBT! It was created by the squid. They print the money, they control the government, the fed, the staged political divide. The currency wars going on are multi sided fronts and the turbulent waves are an opprotunity for us little guys right now. Make the most of them while you still can.
The tax the rich schemes assume a captive audience scenario. The rich don't hold still for being robbed, by government or anyone else. People neglect to consider that the Federal government has to compete for revenue. The rich are able to move their wealth and operations out of the United States. Taxation and labor issues have already moved industrial capacity out of the United States. Squeezing the Golden Goose is over with. Now, people are trying to squeeze turnips.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Did someone forget that most of the 1% owe their wealth to special-interest actions by the government? The government is a huge crporation controlled by the top 0.01%. It serves their interest and non-one else. Start by eliminating that crony connection and the rest will sort itself out.
You mean the government represents no one but the top 1%? Not a soul other than the top 1%? What about the bottom 50% that pay no federal income tax(they probably get more out than paid in) and the nearly 50% that receive some type of entitlement? You're only seeing half the picture. The top 1% doesn't have the sheer number of votes needed to actually effect anything, so they must purchase those votes. The top 1% pays the bottom 50% to allow them to fuck the middle 49%.
Lowering the deficit is not important. Punishing producers is what's important.
/s
Punishing the producers of mass financial ponzi fraud is what is important.
Taxing individuals more? No that won't help.
But corporations GETTING money from the government more than they give, that don't work, neither.
We are never going to pay off the $15 Trillion - people simply would not stand for the years and years of cutbacks this would require. Let the rich people keep their dollars and let the poor pay zero taxes. It just does not matter anymore. Get yours while you can. The whole system is going to have to reset - it has just become unmanageable and unfixable at this point.
That's the debt we admit to. That social security lock box was made in China, so it's not hard to spring it open, and it's full of IOUs.
Princeton Brews Trouble for Us 1 Percenters: Michael Lewis BloombergBy Michael Lewis | Bloomberg – 18 hours ago
"To: The Upper Ones, From: The Strategy Committee, Re: The Alarming Behavior of College Students
The committee has been reconvened in haste to respond to a disturbing new trend: the uprisings by students on elite college campuses.
Across the Ivy League the young people whom our Wall Street division once subjugated with ease are becoming troublesome. Our good friends at Goldman Sachs, to cite one example, have been forced to cancel their recruiting trips to Harvard and Brown. At Princeton, 30 students masquerading as job applicants entered a pair of Wall Street informational sessions, asked many obnoxious questions ("How do I get a job lobbying the U.S. government to protect Wall Street interests?"), rose and chanted a list of charges at bankers from JPMorgan and Goldman Sachs, and, finally, posted videos of their outrageous behavior on YouTube."
http://finance.yahoo.com/news/princeton-brews-trouble-us-1-000000782.html
Fascinating article.
Oh lordy, TD throws out the same, tired red herring:
"In other words, the "rich"--or those who the average person considers "rich"--already pay most of the Federal taxes."
Yes, but they DON'T pay all the taxes, which constitutes, or at least used to, the bulk of the taxes.
Now, let us examine reality, for a change.
The ultra-rich have melted the economy, and dismantled it, with the endless peddling of junk paper, which they then use for ultra-leveraged speculation on their rigged markets.
They have made over $7 trillion, and have an estimated $12 trillion parked offshore to avoid any and all taxation --- add to that the reality that over 70% of American-based multinationals and corporations avoid paying the federal taxes they damn well should pay, while destroying the American tax base by doing that, dismantling and cannibalizing the economy, while offshoring jobs and technology --- which the real workers have industriously created --- thus further destroying the tax base --- along with their continuous hedge fund scams and private equity leveraged buyouts.
Unfortunately, TD is resorting to the same, tired Rockefeller bullcrap --- and nobody's buying it who can do the simple arithmetic.
[$13 trillion lost in wealth to the majority of Americans during 2007 -- 2009, due to job loss, stocks, etc. losses and downsizing or ending of credit and lines of credit ----- meanwhile, the Fed sent over $11 trillion in liquidity/credit to banksters and corporations (including private equity firms and hedge funds) throughout the planet during the same time, plus $750 billion in TARP (which wasn't fully paid back -- another lie and red herring -- plus expenses for coordinating it, payments to hedge fundster, Blackrock, etc., adding up to $1 trillion in bailout funds added to that approximately $12 trillion equals.................$13 trillion ---- funny how those things just happen to balance out???????????]
Tyler just proves that we can't afford our bloated offensive military and endless wars in every corner of the world.
Taxing 'the rich' and Cutting 'entitlements' while the debt creation machine i.e the Federal Reserve with their permanent bail outs of themselves and funding of the never ending war machine are in full effect, serves no purpose.
As tax payers, all that any of this means, is that we pay more and get less. Why would anyone agree to any of it?
Exactly. Stop funding the rich through the Federal Reserve and the banks and the military and the oil companies, etc. and taxes wouldn't be an issue.
Double post.
look here folks high taxes and a controlled banking sector could not possibly create a fair society .. with the greatest equality of opportunity ever created and happiest and most contented better educated populous in the world could it... could it ...
http://www.bloomberg.com/news/2011-12-02/swedish-bonds-safer-than-german...
New rule a few lines of TAX code.
No more income taxes.
Tax all spending and other form of exchange e.g barter. Including buying shares, gold, silver, houses, cars, food, derivatives, drugs at 8% flat tax.
This may go up or down depending on how many government services we want. For example want more roads, hospitals or military? Then this rate goes to 10% want less this goes down to 4%
I am 100% with you on cutting income taxes and replacing them with consumption taxes. However, taxes should be limited to things that people actually consume. Pure transactions (transfer of business ownership via a stock sale or a gold purchase) shouldn't be taxed; less friction in this process helps foster efficient capital markets. A flat consumption tax on everything else that people actually consume is in order.
Consumption taxes are regressive and should not be applied to necessities of life. They force low earners (who spend ebvery dollar that they have on day to day living expenses) to pay more of their income on taxes than the rich.
Luxury consumption taxes are a good idea however.
Financial transactions must be taxed because the efficiency of capital markets is less important than undermining the ponzi nature of excessive, unproductive and high frequency financial trading.
No income tax.
No inheritance tax.
Not any other tax just one flat consumption tax levied equally on everything.
I am saying tax everything BONDS, Term deposits, insurance, derivatives, gold, silver, stock, equities, companies, yachts, ferraris, mansions, food, fuel, school, smoking, alcohol, shoes, tyres, pencils the lot at ONE FLAT TAX heck there might be so much cash it could be less than 5%.
You want the US to be the top dog economically again? (you still are just not as big as you used to) implement the above and watch the economy ROAR!!
I disagree the flat tax has to be on all economic transactions.
The problem today is that we have effectively no friction and people are just flipping houses, bonds, HFT stocks. People should be prepared to get into something and actually hold it for more than five seconds.
A flat tax on EVERYTHING would work. Talk about simplifying the tax code, which today is nothing but allowing rich people and corporations to funnel everyting into the non taxed side of the ledger.
Absolutely!
Taking the $12trillion the upper 1% owns and sending everyone else a check for $4000 would instantly cure America's woes.
Just ask any old neo marxist err modern centrist.
Maybe the govt should just increase the tax rate on businesses to 100% and drive every single one overseas.
Might as well just cut to the chase and get it over with, right?
They'd still find a way to spend every single penny on new shiny stuff.
Further up the thread people referred to the high tax rates the rich folks paid in the 50's and 60's. This period was great for the blue collar working folks. Wages were fair and taxes were pretty high for them but not too bad.
All the taxation caused the rich to avoid taxes by investing capital in new ventures, new production machines, charitable donations, all the things they could write off. We had sustained growth and a world class industrial sector then. We could use some of that now.
Tariffs on goods that are unfairly subsidized by their governments, military using only American made equipment, cutting some onerous regulations and red tape for companies that start-up and hire, these might be tried before we go tits up.
From SGS ( http://www.shadowstats.com )
No. 410: Special Commentary, GAAP-Based 2011 U.S. Financial Data (December 28th, 2011)
• Actual 2011 Federal Deficit Topped $5.0 Trillion
• U.S. Government Debt and Obligations Top $80 Trillion
• Long-Term U.S. Insolvency/Hyperinflation Remain Virtual Certainty
DP
EAT THE RICH!http://www.youtube.com/watch?feature=player_embedded&v=661pi6K-8WQ
Bill Whittle does a great job breaking it down!
Is America really broke? Michael Moore (and others) tells us that there are oceans of cash being hoarded by the wealthy. But Iowahawk (iowahawk.typepad.com) did a little addition, and armed with these statistics Bill and the 'Hawk blow a hole in the "hoarding" lie big enough to fit a documentary filmmaker through.
If the top 1% of rich people pay 39% of all taxes, then all we need is another 1% of our taxpayers to be rich. Petty demonizing the rich creates capital flight. Under Carter the top tax rate was over 70%, and the top 1% only paid 19% of all taxes.
Tax rates and tax revenues are two different things. Class warfare hurts poor people the most. Deficit spending is theft, and hurts the middle class and poor people the most. Just freezing government spending is rated as a $9 Trillion cut over ten years by the CBO. Sop the madness.
well have a look at these simple charts.. which may just give you an inkling of what no tax free everything for the rich has brought us...
http://jessescrossroadscafe.blogspot.com/2011/12/five-charts-useful-for-...
and our politicians will continue allowing this letting our children die robbed on the street by these parasitic bastards....
You're wrong on the Switzerland thing. As a US citizen, you are liable for tax on all worldwide earnings. If Switzerland taxes you 25% on your income there, you still owe the US gvmt another 25% (50% reduced by 25% via double taxation treaties). Of course the lower tax rate makes it attractive to evade the tax owed, but all you need is an opportunistic employee of your Swiss bank to sell your data to the US gvmt and you go to jail for tax evasion.
If you don't want to pay US taxes, you need to relinquish your US citizenship (bazaar I know, most other countries don't tax you on worldwide income unless you live there) So depends if you want to burn your bridges or not.
No, because the problem of our age is:
II Timothy 3: 1 "This know also, that in the last days perilous times shall come, for men shall be lovers of their own selves, covetous, boasters, proud..."
People have substituted faith in God with money and have heaped up riches to their own condemnation. Nothing wrong with saving, but how much is too much? Hoarding is morally corrupt. The money should be put back into circulation. Then the super-rich having so much money, lust for more-- for power, and they begin to think they can make decisions on the population at large, Bill Gates. But the problem/answer is in your own heart. Don't hate, it's selfish, too.
Let's tax every American at 100% of their income. What you will then find out is that there is NOT ENOUGH funds to begin fill this damned hole. Its the only way these a-holes are going to get shown for their lies by people that propagate this taxing BS. Do the math.
The tax the rich stuff is designed to do nothing but promote class warfare by deflecting the problem from the political jackals that created overspending to get re-elected by the blood sucking entitlement crowd and crony interests! Meanwhile the gainfully employed middle class is getting sucked dry by both the banking/financial vampires/thieves and the perpetual wards of the state that refuse gainful employment or expect undeserved entitlements.
People that actually produce something aren't the problem - its the damned money changers and those pigs that continually come to the government troughs to have their cronies pledge public monies for a known FAILED enterprise (ie. GM). Government has NO RIGHT to decide who will stay in business or commit public funds to strictly public ventures. Its time these backing WIMPS grew a pair and sucked up and admit to thier failures and losses.